QE? Mon Aug 9

The Aussie market thinks Quantitative Easing (in the USA) is on its way because after a nervous opening flutter, led by the Spi, which took the market right down to the 4540 support level, the Xjo has bounced 25 points to be unchanged by 10.52 am. The moves are fairly even across sectors although you might expect resource stocks to be the best placed because QE should bring USD weakness and commodity strength. That was the case on Friday anyway, with base metals holding up well into early selling and gold jumping 1% or so.
With gold in mind, I've gone long St Barbara which is a small producer under new management. They've pulled back from 39.5 about a month ago and I've gone long at 29.5 with the stock having held around support formed by the highs of March and April this year. The fall since June looks corrective at this stage, with the c wave down having broken up into 5. I'm punting that this is enough of a fall and a rally up through the lows of the a wave at 31.5 would be a good indicator that the tide has turned. My stop is at around 26.

12.16 The turnaround has continued with the market now up 15 points at 4581 and just short of last week's high. Linc is hovering just under 200 which I thought might be a reasonable target. Looking at a shorter term chart, 30 minutes in this case, it's shaping up more bullishly than that. There are series of little surges and minimal corrections over the last few trading days, a good sign that buyers are having to pay up still.

2.14 The index briefly broke through the trading band and made a marginal new high at 4586. I'm itching to sell a few things because I was just looking for a new high but my long positions don't look particularly toppy. Maybe the 3 or 4 day congestion has given stocks enough of a pause so that they can do more than just pop up to the top of the range.

I haven't got many One Steel left so I'm offering the last of those at 319 and a couple of Cgf at 366.

Just to finish up with the 10 minute Xjo chart that I was posting from time to time last week, here it is below.

3.45 We're now clearly out of the range, up 29 at 4595, with the trading day drawing to a close.

Sold a couple more Cgf at 370. Mmx isn't out of the woods but is reluctantly tracking the better performing iron ore stocks and has firmed a few cents to 183.

4.18 The market held through to the close. Challenger had a good day, rising 3% after opening down 2.5%. The chart looks promising now, it could have a couple of acceleration days up.